California real estate: The income you need to buy a home has doubled over the last five years

The annual income required to buy a median-priced home in California has more than doubled over the last five years.

That striking bit of news comes from a report by the California Association of Realtors. In the second quarter of 2017, it says, buyers needed a minimum annual income of $110,890 to qualify for a single family home priced at $553,260, the statewide median. Compare that to the first quarter of 2012, when a minimum income of $56,320 was needed to purchase a home priced at $279,190, which was the median at the time.

The situation has grown even more dire in the nine-county Bay Area where a minimum income of $90,370 was needed five years ago to purchase a median-priced home of $447,970. Today, the minimum required income has climbed to $179,390 while the median price has ratcheted up to $895,000 for the region. But while that $179,390 might get you something in Alameda County (where the median home price is $880,000) or Solano County ($412,000), it’s not so likely to get you anything in San Francisco ($1,450,000), San Mateo County ($1,469,000) or Santa Clara County ($1,183,440).

The report shows that affordability is hard to come by throughout the state. The monthly payment on a median-priced, single family home in California, including taxes and insurance on a 30-year fixed-rate loan, was $2,770 in the second quarter, assuming a 20 percent down payment and an effective composite interest rate of 4.09 percent.

The second-quarter report adds that 29 percent of California households could afford to buy a $553,260 median-priced home — down from 32 percent in the first quarter and also down from 31 percent in the second quarter of 2016. The percentage of buyers able to swing a deal for condos and townhomes was higher — 38 percent — as those homes have a lower median price of $443,400. An annual income of $88,870 was needed to make the monthly mortgage bill of $2,220.

The state’s least affordable counties were San Francisco (where only 12 percent of buyers could afford a median-priced, single family home), San Mateo (14 percent) and Santa Barbara (16 percent), followed by Marin, Santa Clara and Santa Cruz (all 17 percent). In Alameda County, 19 percent of buyers could afford a median-priced home, compared with 31 percent in Contra Costa County.